History of money
History of money
basic course
Introduction
Hello, I am Asse Sauga, co-founder of Estonian Cryptocurrency association, cryptocurrency expert, blockchain trainer and former technical lead of Dagcoin. I was one of the first who graduated Digital Currencies course in Nicosia University and I was world’s first blockchain expert hired by a bank (LHV bank, Estonia).
I have been an everyday bitcoin user for already 3 years and a big fan of decentralised technologies.
This course will give you a brief overview about money, cryptocurrencies and technology behind it. It’s not too technical but it’s probably not too simple either. There are some challenges and google challenges where you need to do a little bit of extra research.
So, good luck and hopefully these materials will help you in making your first steps into this fascinating cryptoworld.
What is money? - Definition
Don’t you think, that it’s weird that money, as one of the oldest technologies in humankind, has not been taught in schools to all of us? They say that it is very complicated. Well, actually it isn’t. It depends.
“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.” Wikipedia
Shortly, money is a system of storing and transferring materialistic values.
3/18
History of money
basic course
Introduction
Hello, I am Asse Sauga, co-founder of Estonian Cryptocurrency association, cryptocurrency expert, blockchain trainer and former technical lead of Dagcoin. I was one of the first who graduated Digital Currencies course in Nicosia University and I was world’s first blockchain expert hired by a bank (LHV bank, Estonia).
I have been an everyday bitcoin user for already 3 years and a big fan of decentralised technologies.
This course will give you a brief overview about money, cryptocurrencies and technology behind it. It’s not too technical but it’s probably not too simple either. There are some challenges and google challenges where you need to do a little bit of extra research.
So, good luck and hopefully these materials will help you in making your first steps into this fascinating cryptoworld.
What is money? - Definition
Don’t you think, that it’s weird that money, as one of the oldest technologies in humankind, has not been taught in schools to all of us? They say that it is very complicated. Well, actually it isn’t. It depends.
“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.” Wikipedia
Shortly, money is a system of storing and transferring materialistic values.
What is money? - Function of currencies
There are 3 main roles, which money needs to fulfill to act as a complete currency:
● Medium of exchange - We can exchange currency in an understandable manner for all parties.
● Unit of account - unit that is used to measure currencies as representatives of real values. For example, 2 USD is equal to 1 small cafe.
● Store of value - Needs to have trust that a particular amount of money is valued as much tomorrow as it is today.
4/18
History of money
basic course
Introduction
Hello, I am Asse Sauga, co-founder of Estonian Cryptocurrency association, cryptocurrency expert, blockchain trainer and former technical lead of Dagcoin. I was one of the first who graduated Digital Currencies course in Nicosia University and I was world’s first blockchain expert hired by a bank (LHV bank, Estonia).
I have been an everyday bitcoin user for already 3 years and a big fan of decentralised technologies.
This course will give you a brief overview about money, cryptocurrencies and technology behind it. It’s not too technical but it’s probably not too simple either. There are some challenges and google challenges where you need to do a little bit of extra research.
So, good luck and hopefully these materials will help you in making your first steps into this fascinating cryptoworld.
What is money? - Definition
Don’t you think, that it’s weird that money, as one of the oldest technologies in humankind, has not been taught in schools to all of us? They say that it is very complicated. Well, actually it isn’t. It depends.
“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.” Wikipedia
Shortly, money is a system of storing and transferring materialistic values.
What is money? - Function of currencies
There are 3 main roles, which money needs to fulfill to act as a complete currency:
● Medium of exchange - We can exchange currency in an understandable manner for all parties.
● Unit of account - unit that is used to measure currencies as representatives of real values. For example, 2 USD is equal to 1 small cafe.
● Store of value - Needs to have trust that a particular amount of money is valued as much tomorrow as it is today.
What is money? - Medium of Exchange
Money is a more efficient way for exchanging products and services than the barter system. Money serves the role of an intermediary between the products or services that are traded.
A great medium of exchange is:
● Durable - metals vs. paper
● Portable - paper money vs. metals, digital money vs. paper money
● Divisibility - Metals vs. paper money
● Non-counterfeitable - A major problem for almost all currencies
● Fungibility - Each unit is identical to others in its characteristics and functions
● Accepted - Currency is accepted by many merchants and buyers
5/18
History of money
basic course
Introduction
Hello, I am Asse Sauga, co-founder of Estonian Cryptocurrency association, cryptocurrency expert, blockchain trainer and former technical lead of Dagcoin. I was one of the first who graduated Digital Currencies course in Nicosia University and I was world’s first blockchain expert hired by a bank (LHV bank, Estonia).
I have been an everyday bitcoin user for already 3 years and a big fan of decentralised technologies.
This course will give you a brief overview about money, cryptocurrencies and technology behind it. It’s not too technical but it’s probably not too simple either. There are some challenges and google challenges where you need to do a little bit of extra research.
So, good luck and hopefully these materials will help you in making your first steps into this fascinating cryptoworld.
What is money? - Definition
Don’t you think, that it’s weird that money, as one of the oldest technologies in humankind, has not been taught in schools to all of us? They say that it is very complicated. Well, actually it isn’t. It depends.
“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.” Wikipedia
Shortly, money is a system of storing and transferring materialistic values.
What is money? - Function of currencies
There are 3 main roles, which money needs to fulfill to act as a complete currency:
● Medium of exchange - We can exchange currency in an understandable manner for all parties.
● Unit of account - unit that is used to measure currencies as representatives of real values. For example, 2 USD is equal to 1 small cafe.
● Store of value - Needs to have trust that a particular amount of money is valued as much tomorrow as it is today.
What is money? - Medium of Exchange
Money is a more efficient way for exchanging products and services than the barter system. Money serves the role of an intermediary between the products or services that are traded.
A great medium of exchange is:
● Durable - metals vs. paper
● Portable - paper money vs. metals, digital money vs. paper money
● Divisibility - Metals vs. paper money
● Non-counterfeitable - A major problem for almost all currencies
● Fungibility - Each unit is identical to others in its characteristics and functions
● Accepted - Currency is accepted by many merchants and buyers
What is money? - Unit of Account
Money is a standard nominal measurement unit for the value of goods, services, economic activities, assets and liabilities. Unit of account allows us to compare for example the value of 10 lemons to the value of 1 book.
Stability in the value of the unit makes it more useable as a unit of account. For example, USD is much more stable than bitcoin, therefore easier to use.
Features of money as a unit of account:
● Divisibility- can be divided into smaller parts with equal collective value to the original.
● Fungible - one unit is same as any other unit with no change of value. An ounce of gold is valued equally to another ounce gold. Real estate is different.
● Countable - unit of account is countable and subject to mathematical operations.
6/18
History of money
basic course
Introduction
Hello, I am Asse Sauga, co-founder of Estonian Cryptocurrency association, cryptocurrency expert, blockchain trainer and former technical lead of Dagcoin. I was one of the first who graduated Digital Currencies course in Nicosia University and I was world’s first blockchain expert hired by a bank (LHV bank, Estonia).
I have been an everyday bitcoin user for already 3 years and a big fan of decentralised technologies.
This course will give you a brief overview about money, cryptocurrencies and technology behind it. It’s not too technical but it’s probably not too simple either. There are some challenges and google challenges where you need to do a little bit of extra research.
So, good luck and hopefully these materials will help you in making your first steps into this fascinating cryptoworld.
What is money? - Definition
Don’t you think, that it’s weird that money, as one of the oldest technologies in humankind, has not been taught in schools to all of us? They say that it is very complicated. Well, actually it isn’t. It depends.
“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.” Wikipedia
Shortly, money is a system of storing and transferring materialistic values.
What is money? - Function of currencies
There are 3 main roles, which money needs to fulfill to act as a complete currency:
● Medium of exchange - We can exchange currency in an understandable manner for all parties.
● Unit of account - unit that is used to measure currencies as representatives of real values. For example, 2 USD is equal to 1 small cafe.
● Store of value - Needs to have trust that a particular amount of money is valued as much tomorrow as it is today.
What is money? - Medium of Exchange
Money is a more efficient way for exchanging products and services than the barter system. Money serves the role of an intermediary between the products or services that are traded.
A great medium of exchange is:
● Durable - metals vs. paper
● Portable - paper money vs. metals, digital money vs. paper money
● Divisibility - Metals vs. paper money
● Non-counterfeitable - A major problem for almost all currencies
● Fungibility - Each unit is identical to others in its characteristics and functions
● Accepted - Currency is accepted by many merchants and buyers
What is money? - Unit of Account
Money is a standard nominal measurement unit for the value of goods, services, economic activities, assets and liabilities. Unit of account allows us to compare for example the value of 10 lemons to the value of 1 book.
Stability in the value of the unit makes it more useable as a unit of account. For example, USD is much more stable than bitcoin, therefore easier to use.
Features of money as a unit of account:
● Divisibility- can be divided into smaller parts with equal collective value to the original.
● Fungible - one unit is same as any other unit with no change of value. An ounce of gold is valued equally to another ounce gold. Real estate is different.
● Countable - unit of account is countable and subject to mathematical operations.
What is money? - Store of Value
A store of value is a mechanism by which wealth can be saved and retrieved in the future with some predictability about its future value. In general, a store of value is the function of assets.
Gold / silver / diamonds
Reserve currencies
Stocks / bonds / Real Estate
Real Estate is one of the best stores of value.
oogle challenge: Is there any money in the world, that is backed by real value? Gold?